I am happy this topic of running nonMac apps on ARM is coming up. I want to hear about VMware, Parallels, Docker next.
There are two big changes in M1 macs.
First, the virtualization framework is a new one. Anyone trying to run virtual machines on M1 needs to rewrite the virtualization-related code. This is the reason why Docker is not (yet publicly) available for M1. After this is done, the tools you mention above will allow running ARMv8 guests on M1 Macs.
Second, different instruction set destroys binary compatibility at CPU level. Rosetta fixes this for Mac applications, but Rosetta specifically does not (can not and will not) support virtual machines. Anyone trying to run Intel code in a virtual machine needs to have a virtual machine able to interpret machine code form x86/x64 to ARMv8.
What we know at the moment:
1. VMware: will rewrite virtualization code, will be able to run ARMv8 Windows (if license allows) and Linux. May create emulation layer and thus be able to run x86/x64 operating systems as guests.
2. Parallels: as above. Maybe slightly more probably supports x86/x64 for competition reasons (Mac community is only a niche for VMware).
3. Docker: will rewrite virtualization code, will be able to use all dockers able to run on ARM (vast majority). Will not create an emulator.
All three have indicated they are soon releasing a fully working virtualization system. Parallels demonstrated theirs months ago.
However, the emulation stuff is more complicated. There are at least two opposite trends. If MS releases a reasonably licensed version of ARM Windows capable of emulating x86/x64 (they have all the software already now), the incentive for carrying out a huge development project for emulation is very small. Very few customers would need x86/x64 emulation outside of Windows.
On the other hand, ARM based solutions are becoming more and more common. Laptops and desktops are the last Intel fortress, as even supercomputers and cloud services are migrating to the ARM world. So, it might happen there would be more demand for high-quality emulation layers.
(And, on the yet another hand, it might be that almost all server software will just be recompiled, and no one needs emulation beyond some silly desktop software.)